Press Releases

Seoul offers monetary reward for reporting Uber Taxies

– SMG defines the business activities of Uber Black and Uber X as the clear violations of the current law, citing five problems of their business.

– SMG will crack down business and drivers engaged in the illegal paid transportation service.

Those who report Uber taxies, which are engaged in illegal paid-transportation business with rent cars, will be awarded with monetary reward, worthy of up to 1,000,000 KRW.

Seoul Metropolitan Government sets out to detailed report method and specific amount of reward, as the amended municipal ordinance mandates the city government to give out reward within the range of KRW one million for reporting illegal paid-transportation service.

Seoul city government defined the business activities of Uber Black and Uber X as the clear violations of the current law, which exploit the loopholes of the law, pointing out the following five problems of their business; 1) It cannot guarantee passenger safety due to insufficient insurance coverage and lack of background check of the drivers, 2) It can rip off passengers as it provides services at an unfixed rate, 3) Its users’ policy is disproportionately disadvantageous to users, 4) It does not assume any basic responsibility for its service, although it charges 20% commissions of the transportation fees, 5) It undermines sharing economy.

SMG first pointed out the fact that Uber makes it difficult for the city government to guarantee the safety of the service users, as it disobeys the Passenger Transport Business Act, which aims to establish order of transportation business, to promote expedite and safe passenger transportation service and public good.

For example, in case of a car accident, even if the rent car used in the Uber service is covered by insurance, it is highly unlikely that an insurance company will pay the insurances for passengers, with grounds that the rent person/Uber driver used the car for the illegal paid-transportation service. Uber says all the rent cars in its service are covered by insurance, but it will be difficult to guarantee all the passengers will be protected by the insurance if a car has an accident while transferring a number of unidentified people.

Another problem is that Uber evades assuming the basic responsibility as an application provider, despite the fact that it takes 20% commission of transportation fees. Uber’s business policy states that except a few cases where Uber is liable for a death, injury or damages due to its deliberate malpractice or overall negligence, it will not be held accountable for damages or losses incurred by inaccuracy or incompleteness of the application and the unavailability of the application due to malignant code or virus. This policy can be translated that Uber rejects to assume any responsibility for its service use, unless the related problem is not caused by its own deliberate action or negligence.

In addition, SMG said that Uber does not promote the sharing economy but rather undermines it. SMG noted that volunteer sharing and participation are the prerequisites of the sharing economy, but the adherence of the current law comes before all other factors. Sharing economy refers to economic activities which seek to find and promote meaningful values by tapping into unused/underused spaces and resources.

Uber turns a blind eye to the the Passenger Transport Business Act and its related laws, which make it mandatory for the business to meet certain requirements for safe passenger transfer service. SMG made it clear that Uber is not a part of sharing economy, but only a business which profits from taking commissions for soliciting illegal hire taxi services.

In order to eradicate the illegal paid transportation services of Uber, SMG sued Uber Korea and the related-rent car companies for seven times. Currently, Uber is yet to be indicted, as prosecutors are reviewing the related laws and legal principles.

In the meantime, SMG plans to consistently crack down on rent car companies and drivers engaged in Uber-related service until the Passenger Transport Business Act is amended to provide clear legal grounds for the persecution of Uber.